A premium on execution: Meet Debasish Panda, chairman of Irdai

When the Covid-19 pandemic ravaged India, insurance companies were delaying and even denying claims, including cashless health insurance ones. The government stepped in, and asked them to clear claim settlements under the Pradhan Mantri Garib Kalyan Package (PMGKP) Insurance Scheme for health workers, as well as the Centre’s flagship insurance schemes, Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).

The bureaucrat leading these consultations with the Insurance Regulatory and Development Authority of India (IRDAI) was Debasish Panda, secretary, Department of Financial Services (DFS) under the finance ministry. Afterwards, insurers created a framework that processed claims under PMJJBY and PMSBY to be completed within seven days against 30 days earlier. At the same time, the claim settlement process between banks and insurance companies began to be digitised.

At the DFS, Panda, 60, created a group of officials to monitor speedier claim settlements for deaths due to Covid-19. According to an official who worked with Panda, a 1987 batch IAS officer of the Uttar Pradesh cadre, the secretary told those working on these claims that insurance is for the public and should deliver on its promises.

“This was a rare incident where the government had stepped in and asked IRDAI to facilitate faster claim settlements, and Panda as a leader was solution-oriented and expected time-bound delivery of outcome from his officers,” he added. Another official working under him recollects that he had set out a clear directive to ensure nobody dies uninsured.

As Panda saw it, ensuring time-bound settlement of claims would help increase the penetration of insurance products. No doubt this insight played a part in his appointment as head of the insurance regulator for a three-year term. But speedy settlement of claims is only one of the challenges in this industry. Even after 20 years of delicensing, India’s insurance penetration has inched up from 2.71 per cent in 2001-02 to 4.20 per cent as of 2020-21. Expanding this metric will be Panda’s biggest challenge. He’ll also have his work cut out examining requests from general insurance companies for a hospitals regulator, alleging exorbitantly post-pandemic rate hikes, forcing insurers to foot higher bills.

But he has experience coping with knotty situations. His tenure at the banking division started with overseeing the moratorium imposed by the Reserve Bank of India (RBI) on YES Bank. This occurred when about 1.7 million depositors, mostly senior citizens, of Punjab & Maharashtra Co-operative Bank were still facing the brunt of restrictions on the multi-state cooperative bank for disproportionate lending to the HDIL group.

These bank failures and subsequent denting of depositors’ trust caused the government to raise the insurance limit on bank deposits to Rs 5 lakh from Rs 1 lakh earlier, and under Panda’s tenure as the financial services secretary, stipulated a 90-day limit within which depositors would receive the insurance money if a bank is placed under moratorium.

Panda’s stint at DFS also covered the privatisation of IDBI Bank, which involved many legal hurdles. Among the sticky issues that needed sorting here was IDBI Bank losing its banking licence if acquired by a private party. It was under Panda that these issues were ironed out, and the government amended the Finance Act to grant IDBI Bank a banking licence.

Although the privatisation of two other public sector banks announced last year has moved at a slower-than-expected pace, the DFS had readied amendments in the Banking Laws (Amendment) Bill, 2021 so that the Centre can continue to hold at least 26 per cent in the two banks after privatisation. These amendments were not tabled in the winter session of Parliament due to disruptions by opposition, and the government skipped the idea of introducing them in the Budget session, owing to impending Assembly elections.

With the Covid-19 pandemic impacting businesses, and with the RBI announcing a moratorium, the Centre, through the DFS, provided relief to individuals by announcing the waiver of interest-on-interest charged on small ticket loans up to Rs 2 crore. The Emergency Credit Line Guarantee Scheme, or the collateral-free loans scheme, announced as a relief measure to help borrowers, especially small businesses, was led by Panda and he is credited with its success.

Another issue that the economy was grappling with was the time-bound resolution of bad loans. The Indian Banks’ Association had suggested the creation of a National Asset Reconstruction Company (NARCL) and sought government guarantees for it. The DFS took the suggestion on board, which was made a Budget announcement, and the Centre provided Rs 30,600 crore guarantees to the NARCL. Panda also oversaw the government-backed National Bank for Financing Infrastructure and Development (NaBFID).

All of this experience gives Panda a solid grounding for his new role, in which the listing of the state-owned behemoth, Life Insurance Corporation, is likely to be a major event. For Panda, with his reputation for getting things done, the jump from a problem-solving bureaucrat to a rules-creating regulator shouldn’t be a long one.